British Airways has sold its 18.24% stake in Qantas, the Australian airline said today.
Announcing its plans to sell the shares yesterday, BA said it expected to gross not less than AUS$1.09bn, about £425m/€620m.
The airline intends to use the proceeds to repay part of its existing gross debt which in June amounted to £5.6bn (€8.2bn).
The stake was reportedly sold to local and international investors at 3.28 Australian dollars (£1.40/€1.87) a share.
The sale price was a 1.5% discount on Qantas’ closing price on Tuesday, the last time shares were bought and sold before the company ordered their trade halted so the market could digest news of the British Airways sell-off.
Trade in Qantas shares is due to resume later today.
The airline bought its original shareholding in Qantas in 1993 for AUS$665m (£304m/€378.7m)). Since then, it has received AUS$600m (£232.9m/€341.7m) in dividends.
Yesterday, BA chief executive Rod Eddington said: “Our shareholders have had a good return from our investment in Qantas.
“We now believe it is in our best interests to sell our shares to pay down our debt and continue to strengthen our balance sheet.
“A strong balance sheet will place British Airways in a robust position for any future European consolidation.”
He said the sale had no impact on the existing business relationship between the two airlines and was not linked to their joint services agreement (JSA) which continues.
Citigroup Inc, which handled the sale on behalf of BA, was reportedly instructed not to sell more than 5% of the carrier to any single investor.
Under Australian law, investors do not have to declare their shareholding in a company if it is under 5%.